The US economy is slowing down, according to research analysts at UBS, the largest bank in Switzerland.
In a new analysis reviewed by Fortune, the financial institution notes that real gross domestic product (GDP) is growing at a significantly slower pace than either of the previous two years, with growth at an annualized rate of just 1.2% in the first half of 2025.
The UBS analysis also points to last week’s tepid employment report from the U.S. Bureau of Labor Statistics, which indicated total nonfarm payroll employment increased by 73,000 jobs in July, less than the Dow Jones estimate of 100,000.
The UBS analysts argue that the “drop in the labor force participation rate has masked how much slackening is actually taking place.”
“Despite Chair Powell’s pronouncement at the post-FOMC (Federal Open Market Committee) press conference that the immigration slowdown was slowing population growth and thus labor force growth, that is not what is happening in the actual data. The Household Survey and Establishment Survey look more like the labor market is slackening, and the household survey itself estimates that population growth is not slowing.”
UBS analysts predict that President Donald Trump’s tariffs will slash 0.1 to 0.2 percentage points from growth over the next year.
The bank predicts the Federal Reserve will cut rates by 25 basis points in September, and the analysts note rates could be slashed by up to 100 basis points before the end of the year.
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